There are certain expenses and benefits that may be given to a Director or Employee, some of which will attract a Tax and National Insurance charge.
We have covered some of the key ones below. Benefits will usually be reported to HMRC on an end of year payroll report called the P11D.
Typical Taxable Benefits
Car/Van
One of the most common questions we get is whether or not it is tax efficient to run a car / van through your company. Several years ago it was tax efficient to do this but these days unless you have an electric car or a van it is usually better to keep them personal.
The reason for this is that you will personally incur a tax charge which is based on the emissions value of your vehicle. The higher the emissions value, the higher the tax charge. This tax charge almost always outweighs any of the other tax saving benefits.
Medical Insurance
You can supply your employees and directors with medical insurance, however they will personally pay income tax on this so it might not be worthwhile, your business will also have to pay national insurance on the benefit.
Tax free Benefits
Mobile phone
You can supply each employee and director with a mobile phone tax free, see our article here.
Equipment
As long as personal use is kept to a small amount then equipment such as computers, laptops and tablets can be provided to the employees / directors tax free.
Medical and Eye check ups
Annual health screening and medicals can be provided tax free, as can eye tests for computer users.
Trivial Benefits
From 16/17 there are rules allowing up to £300 per employee / director of ‘trivial benefits’.
There is also a cap on each single benefit provided of £50.
More information on Trivial Benefits here:
https://jf-financial.co.uk/2017/09/22/trivial-benefits/
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